2024 (2) TMI 461 - AT - Income Tax

Penalty levied u/s 271D - violation of the provisions of section 269SS - assessee sold an immovable property and received part consideration in cash - HELD THAT - As per registered deed of sale, it is clear that the assessee has received part of sale consideration of ₹.1,60,00,000/- in cash. However, the contention of the assessee is that the consideration clause of the deed of sale had wrongly entered the transaction in mode of cash while in reality it was an adjustment of an existing debt through a journal entry. The above contention of the assessee is not acceptable by any Court of Law, claiming to have wrong entry has been made in a document, which was duly signed by both the vendor and purchaser and registered by the Sub- Registrar of the State Revenue Department in the absence of any material evidence. The assessee should have approached the Appellate Authority of the Tamil Nadu State Revenue Department for any modification/addition/deletion, etc., which was not done in this case - we are of the opinion that the ld. CIT(A) has rightly confirmed the penalty levied under section 271D of the Act and thus, the appeal filed by the assessee is dismissed.

Summary

Issues involved:
The appeal against the penalty levied under section 271D of the Income Tax Act, 1961 for accepting part of the sale consideration in cash in violation of section 269SS.

Issue 1 - Condonation of Delay:
The appeal was delayed by 24 days, but the delay was condoned as the assessee provided sufficient cause, and the appeal was admitted for adjudication.

Issue 2 - Penalty under section 271D:
The Assessing Officer imposed a penalty of Rs. 1,60,00,000 under section 271D for accepting part of the sale consideration in cash, violating provisions of section 269SS. The ld. CIT(A) upheld the penalty.

Assessee's Argument:
The assessee contended that the transaction was an adjustment of an existing debt through a journal entry, not a cash transaction. They relied on a decision of the Madras High Court and submitted evidence to support their claim.

Revenue's Argument:
The Revenue argued that the assessee failed to provide sufficient evidence to support their claim of an existing debt adjustment. They contended that the case law cited by the assessee was not applicable to the present case.

Tribunal's Decision:
The Tribunal noted that the registered deed of sale indicated receipt of Rs. 1,60,00,000 in cash, which violated section 269SS. The assessee's argument of a wrong entry was deemed unacceptable without substantial evidence. The Tribunal upheld the penalty, stating that the ld. CIT(A) correctly confirmed it, leading to the dismissal of the appeal.

Conclusion:
The Tribunal dismissed the appeal, upholding the penalty imposed under section 271D of the Income Tax Act, 1961. The decision was pronounced on 7th February, 2024, in Chennai.